By Ted Rall, <a href=www.alternet.org>AlterNet April 25, 2003

Iraq is going to hell. Shiites are killing Sunnis, Kurds are killing Arabs and Islamists are killing secular Baathists. Baghdad, the cradle of human civilization, has been left to looters and rapists. As in Beirut during the '70s, neighborhood zones are separated by checkpoints manned by armed tribesmen. The war has, however, managed to unite Iraqis in one respect: Everyone loathes the United States.

Some Iraqis hate us for deposing Saddam Hussein. No dictator remains in power without the tacit support of at some of his subjects. Now that we've committed the cardinal sin of conquest – getting rid of the old system without thinking up a new one – even those who chafed under Saddam blame us for their present misery.

Others resent our Pentagon-appointed pretender, 58-year-old banker/embezzler Ahmed Chalabi. The State Department points out that Iraq's new puppet autocrat has zero support among Iraqis, having lived abroad since 1958. But who knows? Maybe he was a really popular kid.

Thousands of Iraqis have been reduced to poverty, raped and murdered by rampaging goons as U.S. Marines stood around and watched. We watched the plunder of museums in Mosul and Baghdad safe at home with our tisk-tisk dismay, but Iraqis will remain outraged by the wanton devastation we wrought through war, permitted through negligence and shrugged off through arrogance. "We didn't allow it," Defense Secretary Donald Rumsfeld shrugged. "It happened."

Imagine foreign troops sitting idly, laughing as hooligans trashed the Smithsonian, stole the gold from Fort Knox and burned down the Department of the Interior. That was us in Iraq.

But let's forget this penny ante stuff. Let the real looting begin! George W. Bush's bestest buddies, corporate executives at companies which donate money in exchange for a few rounds of golf and a few million-dollar favors, are being handed the keys to Iraq's oil fields.

Bush's brazen Genghis Khan act seems carefully calculated to confirm our worst suspicions. First he appoints retired general Jay Garner, president of a GOP-connected defense contractor, SYColeman Corp., as viceroy of occupied Iraq. "The idea is we are in Iraq not as occupiers but as liberators, and here comes a guy who has attachments to companies that provided the wherewithal for the military assault on that country," marvels David Armstrong, a defense analyst at the National Security News Service. A smart and/or decent president would have picked a civilian for a civil administration post.

Then Bush slips a $680 million contract to the Bechtel Group. The deal puts the company in position to receive a big part of the $100 billion estimated total cost of Iraqi reconstruction. According to the Center for Responsive Politics, Bechtel gave Republican candidates, including Bush, about $765,000 in PAC, soft money and individual campaign contributions between 1999 and 2002.

Finally, refusing to accept bids from potential competitors, Bush grants a two-year, $490 million contract for Iraqi oil field repairs to Halliburton Co., the Houston-based company where Vice President Dick Cheney worked as CEO from 1995 to 2000. "It will look a lot worse if Halliburton gets the USAID [Agency for International Development] contract, too," Bathsheba Crocker, an Iraq specialist for the Center for Strategic and International Studies, warned in March. "Then it really starts looking bad." Guess what! Halliburton has since scored a piece of that $600 million USAID contract.

Are we looking bad yet?

Only Bush's most intimate friends were invited to bid for these contracts. Even businesses based in Great Britain, where Prime Minister Tony Blair risked his political career to support Bush, have been excluded from a rigged process where only U.S.-based, Republican-led, Bush-connected companies need apply.

Two senior Democratic Congressmen, Henry Waxman and John Dingell, are asking the General Accounting Office to look into these sleazy kickback deals. "These ties between the vice president and Halliburton have raised concerns about whether the company has received favorable treatment from the administration," their letter reads. Well, duh. But don't count on appropriate action – like impeachment proceedings – from the do-nothing Dems.

Bush's right-wing Gang of Four – Cheney, Rummy, National Security Advisor Condoleezza Rice and Deputy Secretary of Defense Paul Wolfowitz – saw Operation Iraqi Freedom as a chance to line their buddies' pockets, emasculate the Muslim world, place U.S. military bases in Russia's former sphere of influence and, according to the experts, lower the price of oil by busting OPEC.

"There will be a substantial increase in Iraqi oil production [under U.S. occupation], and I wouldn't be surprised if schemes emerged to weaken, if not destroy, OPEC," says Jumberto Calderón, former energy minister of Venezuela. Former OPEC secretary general Fadhil Chalabi (no relation to Ahmed) estimates that increased exploration could potentially double Iraq's proven reserves, which would raise production from 2.4 to 10 million barrels a day. Such Saudi-scale production would "bring OPEC to its knees," says Chalabi.

The cartel's member nations, ten of 11 of them predominantly Muslim, would suffer staggering increases in poverty as a result of falling oil revenues, plunging some into the political chaos that breeds Islamist fundamentalism. Meanwhile, the people of Iraq, whose self-flagellating Shias already make the evening news look like a rerun of Iran's 1979 Islamic revolution, would starve as foreign infidels raked in billions thanks to the oil beneath their land.

Time to dust off the duct tape.

Ted Rall is the author of "Gas War: The Truth Behind the American Occupation of Afghanistan," an analysis of the underreported Trans-Afghanistan Pipeline project and the real motivations behind the war on terrorism.

<a href=www.outlookindia.com>Znet-outlookindia.com Web | Apr 25, 2003

The struggle for secular democracy in the third world, if sincere, is inseparable from our struggle at home against Western imperialism.

JEAN BRICMONT

The slogan was repeated around the world: "no blood for oil". But blood and oil have flowed together for a long time. From the betrayal of the Arab world by the French and the British following the fall of the Turkish empire in 1917 to the latest war against Iraq, Western policy has been dominated by oil. Western thirst for oil has been satisfied through opposition to Middle Eastern reformists in favor of the most backward and corrupt traditional rulers, through support to the strategic asset of aggressively modern Israel, through fanning the flames of the Iran-Iraq war of the 1980s, then the 1991 Gulf War followed by endless embargo and bombing of Iraq.

In 1945, the U.S. State Department described the Saudi Arabian petroleum reserves a "stupendous source of strategic power and one of the greatest material prize in world history". Today Bush's war regime is less frank and pretends that the conquest of Iraq has nothing to do with its huge petroleum reserves. However, their soldiers massively protect the Petroleum Ministry in Baghdad while abandoning to looters and vandals the ministries responsible for public services, the hospitals and the country's priceless archeological treasures. The looting can serve to demoralize and divide the population of a conquered country and make it welcome whatever invader is able to use force to restore law and order.

Today there is universal rejoicing over the end of the dreadful dictatorship of Saddam Hussein, as if opponents and advocates of the war could at least agree that the Pentagon chose the right target. But the Pentagon has already struck many targets in the past, and will be encouraged to strike many more in the future, and crimes such as those attributed to the Iraqi dictator have little to do with the criteria for selection.

In their effort to escape from Western exploitation, third world peoples have produced many diverse leaders: Ho Chi Minh, Mao Tse Tung, Gandhi, Martin Luther King et Malcolm X, Lumumba, Nkrumah, Nasser, Allende, Fidel Castro, Amilcar Cabral, Arafat, the Sandinistas, Ben Bella and Ben Barka... All these leaders, and in Europe, the rare defenders of third world revolution, Olof Palme in Sweden or Otelo de Carvalho in Portugal, all of them, whether reformist or revolutionaries, socialists or nationalists, armed or non-violent, have all been reviled by the "Free World", and have been various plotted against, demonized, invaded, imprisoned or assassinated by the West or its agents.

In 1953, the CIA overthrew the reformist Iranian prime minister Mossadegh in favor of the Shah's dictatorship which led to the Islamic revolution and the regime of the Ayatollahs. In 1954, the CIA overthrew the elected reformist president of Guatemala, Jacobo Arbenz, leading to decades of military dictatorship and bloody massacres. In 1965, the United States engineered the overthrow of the reformist Goulart in Brazil, the reformist Juan Bosch in the Dominican Republic and President Soekarno in Indonesia, with hundreds of thousands of victims. Mandela is recognized today as a hero, but it should not be forgotten that he spent 27 years in prison with the complicity of the CIA.

Whenever third world peoples try to free themselves by essentially peaceful and democratic methods, whether the Palestinians during the Oslo period, or Allende in Chile, the Sandinistas in Nicaragua and today Chavez in Venezuela, their hopes are countered by violence and endless subversion. If they arrest their opponents like Castro, or turn to violence like the suicide bombers in Palestine or the Maoists in Nepal, their cause is reduced to their methods by Western humanitarians whose standards of pure non-violence never applied to the creation of the modern dominant nations.

Perhaps one should ask the imperial powers to spell out precisely what methods oppressed peoples may be allowed to use for their defense and liberation. 

The failure of the Afghanistan war to catch Osama bin Laden or to create a new democratic Afghanistan is forgotten, just as the Bush administration can hope people will forget the pretexts for the war against Iraq, along with the nonsense about gas masks and duct tape. Richard Perle says the famous "weapons of mass destruction", neither found nor used during the U.S. invasion, may be hidden deep underground, or in Syria...

How many countries can be invaded in the course of this hunt? Now that the U.S. controls the terrain, any belated "discovery" will have no more credibility than the many discredited "proofs" and falsehoods offered by the Anglo-Americans to justify war. Besides, it is difficult to see how weapons of mass destruction possessed by a regime that does not use them at the very moment that it is toppled can be a threat to anybody. As for the accusation -- which polls indicate was believed by 40% to 50% of Americans -- that Saddam Hussein was linked to September 11, it remains as totally unsubstantiated as ever.

The only pretext left is "democracy", today the opium of the intellectual warriors. The official position of the reluctant European governments and their media is not very different: the war is an illegal and illegitimate aggression, but still, we hope it succeeds as soon as possible. Otherwise, it would be catastrophic for "democracy". The moment may have come to ask some questions about that concept. How does "real existing democracy" appear to people in the Arab world? Just how attractive is a system that gives full power to individuals such as Richard Perle and Paul Wolfowitz, or Reagan's secretary of state George Shultz of the Bechtel corporation and Dick Cheney of Halliburton, whose companies profit rebuilding the countries they pick for destruction?

How impressive is freedom of the press when the mass media, concentrated in few hands, can convince the American public that Iraq was behind the 9/11 attacks? What do they think of being told by the star New York Times journalist Thomas Friedman that "we left you alone for a long time, you played with matches and in the end we were burned. So we're not going to leave you alone any longer". (quoted by Ari Shavit in "White man's burden", Ha'aretz, April 7, 2003). The same Friedman adds that the war against Iraq would never have taken place in the absence of 25 neo-conservative intellectuals, all near his Washington office, whom he could name. So much for democratic process. And what can they think of the choice of retired general Jay Garner, ardent champion of Israel, to be the new proconsul of occupied Iraq?

Enough abuse and hypocrisy can eventually discredit even the best ideas, democracy as well as socialism.

The new conquerors claim to want free elections in Iraq. Let them try. Certainly, it is odd to make war in order to have free elections in Iraq, when there are no such elections in countries already dependent on the United States, such as Egypt. Are there elections in Afghanistan? But the basic reason to doubt the authenticity of U.S. support for free elections in the Middle East is to be seen in the outcome of elections in Algeria, Turkey or Pakistan. The Arab-Muslim world today appears to be largely convinced that if secular nationalism has failed to bring full independence, it is because it was secular. God's help is needed, and God will only help the true believers. The voters will not choose the corrupt pro-Western elites, who more or less openly support Israel, that the West dreams of seeing legitimized through elections. Free elections would be won by political Islam, more hostile to the West than the existing undemocratic regimes.

For all those in the Arab world or in the West who doubt the existence of divine intervention in human affairs, this evolution can only be felt as a huge step backward. Regardless of their mistakes and crimes, Arab nationalists, like the communists, tried to improve human life on earth by the only means accessible: social transformation and not the interpretation of sacred texts. We may believe that such means are not exhausted, but belief in their efficacy has faded.

It is also interesting to contrast the reaction of mainstream Western intellectuals to the overthrow of Saddam Hussein and of the Shah of Iran back in 1979. Both were ruthless dictators, both secular in some ways and both trying to modernize their country. And downfall of both benefits (or will likely benefit in Saddam's case) political Islam. One of them, however, was a close ally of the United States and the other not. The reactions are markedly different- in one case huge celebration, in the other, warnings that the next regime won't be any better.

It is not easy to be optimistic today as Iraq is plunged into a new night of colonialism. But if we take the long view of history, we can see that at the beginning of the twentieth century, all of Africa and a large part of Asia were under the rule of European powers. In Shanghai, the British could declare a park off limits "to dogs and Chinese". The Russian, Chinese and Ottoman empires were helpless to stop Western intervention. Latin America was invaded even more often than now. Since then, colonialism has been defeated and discredited, with a few exceptions, notably Palestine.

Even more than the defeat of fascism, this no doubt constitutes humanity's most important social progress of the 20th century. One of the underlying reasons for the "post-modern" pessimism of so many Western intellectuals, who deny that there is such a thing as historical progress, is that the very real progress of recent times has essentially been attained through the defeat of the West and the gradual emancipation of the colonized peoples. Those who want to revive the colonial system in Iraq -- and why else conquer the country? -- even with an "Arab façade" as the British used to say, are blinded by their military force to the awakened determination of all the world's people to decide their own future. The struggle for the genuine independence of the former colonized peoples is still far from completed, and cannot be stopped by occasional setbacks.

In its present stage, that struggle faces what can be called the "Latin Americanization" of the world, that is, the replacement of Europe by the United States as the center of the imperial system, along with the substitution of neo-colonialism for colonialism, meaning a continuation of traditional pillage, exploitation of third world resources and labor (with the more recent addition of brain-power, imported by the West to make up for the inadequacies of our own education system), combined with formal political autonomy and a correlative delegation of repression tasks. In such a world, there can be no real peace and no genuine democracy, which presupposes national sovereignty.

In 1991, the collapse of their unreliable but only potential defending power seemed to leave third world countries once again at the mercy of the West. The debt mechanism could be used for a gigantic hold up of the raw materials and industries of the south. Small recalcitrant States could be demonized and isolated as "rogues".

With the Oslo accords, the Palestinian resistance could be made to accept the endless fragmentation of the Occupied Territories into tiny bantustans strangled by armed settlements. And yet, things are not going so well for the West. The Americans were chased out of Somalia. The Israeli occupation force was driven out of Lebanon. U.S. control of Afghanistan is precarious. The Palestinians stood up to overwhelming destructive force in Jenin. In Latin America, neo-liberal illusions have evaporated and the neo-colonial system is facing rising challenges. There is no reason to believe that the Iraqi people are resigned to U.S. military rule and that various forms of resistance will not appear. Above all, worldwide opposition to U.S. intervention has never been so strong and widespread. The Bush regime is resorting to repressive measures at home, while its propagandists try to dismiss their ever more numerous critics as "anti-American" or "anti-Semitic".

A new worldwide movement is waking up to the fact that corporate globalization is directly or indirectly enforced by militarization, subversion, intervention and war. The struggle for secular democracy in the third world, if sincere, is inseparable from our struggle at home against Western imperialism.

malaysiakini.com Ahmaf Albab UK 3:38pm Wed Apr 23rd, 2003

I disagree with Wan Sai Hou in his letter stating that the Iraq war was a pre-emptive strike by the US against terrorism instead of exploiting Iraq's oil reserve. Wan, ask yourself, if oil was not the issue, what is? To strike against terrorism? To free the Iraqi people against Saddam's regime? A favour to the Israelis to free the region from weapons of mass destruction (WMD)?

Firstly, the US has never been able and is still trying to prove or convince, call it what you may, the world that Iraq has WMD - something which even Hans Blix of Unmovic has said Iraq doesn’t have. As mentioned in my previous letter, Bush has already hedged his position against this point by saying that freeing the Iraqi people from Saddam's regime was justification enough.

Secondly, if the war is to strike against terrorism, shouldn’t he be looking for Osama instead? What link has there been to prove that Iraq had harboured terrorists? Finding a few people oún the wanted list of terrorists in Iraq doesn’t make Iraq a haven for terrorists. I am sure there are members of these terrorists in the US and the UK not to mention other European countries. The crux of the matter is Iraq’s link to terrorism has not been proven.

Thirdly, if it was about freeing the Iraqi people from Saddam's regime, why now? Why not in 1991 when they left the people they asked to uprise against Saddam for dead? Why not last year or a few years ago? According to Bush, Saddam has been ruling with an iron fist for a long time. So, why leave it so late to justify his actions?

Bear in mind that oúnly Iraq, which has the second largest oil reserves in the world after Saudi, has yet to be an ‘ally’ of the US. Saudi, Venezuela, Iran, to name a few. Essentially, the US will ‘control’ two-thirds of the oil reserves in the world by capturing Iraq and putting a regime the Iraqi people can choose but oúnly approved by the US government.

Below is an excerpt from ABCNews.com: "The fundamental issue is, the day after Saddam is removed, the Iraqi oil industry is open for grabs, and it will depend upon the government of Iraq to decide how it will dispense that resource," says oil consultant Rob Sobhani, a professor at Georgetown University in Washington. "Certainly, American companies would be in a very, very strong position to compete for the right." In addition, not oúnly oil is up for grabs but also the rebuilding of Iraq. Just today, Bechtel, the American engineering and construction giant, has been awarded a United States government contract that could reach US$680 million to help rebuild Iraq's infrastructure.

But read oún..."Other companies that were invited to bid were Parsons, Fluor, Louis Berger and Washington Group. A subsidiary of Halliburton, formerly run by Vice-President Dick Cheney, was invited to bid but decided instead to seek work as a subcontractor. Bechtel rose from a family business to a privately held international engineering powerhouse. Its executives have included George Shultz, a former secretary of state, and Caspar Weinberger, a former US defence secretary.

"The group and its employees have been among the biggest political donors in the general contracting industry, according to an analysis by the Center for Responsive Politics, a Washington-based group that tracks campaign finance..."

One more point, if oil is not the reason(s), why has the coalition guarded oúnly the building that stores all documents and information oún Iraq's oil production and let other buildings, banks and even hospitals to be looted?

Wan, wake up and smell the coffee...the new US imperialist regime is arising and we better be prepared otherwise, we might be next!

ViewPoint Archives

Editor's Note: We all know there are those who question WHY the US has gone to war with Iraq. There seemed to be a reason for each constituency. For those that love freedom rhetoric, Americans would "liberate Iraq." For those that love security, America needed to "root out a terrorist infrastructure." For those that grounded themselves in international legitimacy, America needed to enforce "UN resolutions to find weapons of mass destruction."

For those against the war, there seemed to be other forms of rhetoric, with "no blood for oil" becoming a mainstay.

But there are always reasons BEYOND rhetoric that point the way for grand strategy. Today, we bring a viewpoint that is woefully under represented in US media circles...in fact, it is almost nonexistent...which is why many of you read Viewpoint. This piece was written immediately before the war began.

Not Oil, But Dollars vs. Euros- By Geoffrey Heard

Why is George Bush so hell bent on war with Iraq? Why does his administration reject every positive Iraqi move? It all makes sense when you consider the economic implications for the USA of not going to war with Iraq. The war in Iraq is actually the US and Europe going head to head on economic leadership of the world.

America's Bush administration has been caught in outright lies, gross exaggerations and incredible inaccuracies as it trotted out its litany of paper thin excuses for making war on Iraq. Along with its two supporters, Britain and Australia, it has shifted its ground and reversed its position with a barefaced contempt for its audience. It has manipulated information, deceived by commission and omission and frantically "bought" UN votes with billion dollar bribes.

Faced with the failure of gaining UN Security Council support for invading Iraq, the USA has threatened to invade without authorization. It would act in breach of the UN's very constitution to allegedly enforced UN resolutions.

It is plain bizarre. Where does this desperation for war come from?

There are many things driving President Bush and his administration to invade Iraq, unseat Saddam Hussein and take over the country. But the biggest one is hidden and very, very simple. It is about the currency used to trade oil and consequently, who will dominate the world economically, in the foreseeable future -- the USA or the European Union.

Iraq is a European Union beachhead in that confrontation. America had a monopoly on the oil trade, with the US dollar being the fiat currency, but Iraq broke ranks in 1999, started to trade oil in the EU's euros, and profited. If America invades Iraq and takes over, it will hurl the EU and its euro back into the sea and make America's position as the dominant economic power in the world all but impregnable.

It is the biggest grab for world power in modern times. America's allies in the invasion, Britain and Australia, are betting America will win and that they will get some trickle-down benefits for jumping on to the US bandwagon. France and Germany are the spearhead of the European force -- Russia would like to go European but possibly can still be bought off. Presumably, China would like to see the Europeans build a share of international trade currency ownership at this point while it continues to grow its international trading presence to the point where it, too, can share the leadership rewards.

DEBATE BUILDING ON THE INTERNET

Oddly, little or nothing is appearing in the general media about this issue, although key people are becoming aware of it -- note the recent slide in the value of the US dollar. Are traders afraid of war? They are more likely to be afraid there will not be war.

But despite the silence in the general media, a major world discussion is developing around this issue, particularly on the internet. Among the many articles: Henry Liu, in the 'Asia Times' last June, it has been a hot topic on the Feasta forum, an Irish-based group exploring sustainable economics, and W. Clark's "The Real Reasons for the Upcoming War with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth" has been published by the 'Sierra Times', 'Indymedia.org', and 'ratical.org'.

This debate is not about whether America would suffer from losing the US dollar monopoly on oil trading -- that is a given -- rather it is about exactly how hard the USA would be hit. The smart money seems to be saying the impact would be in the range from severe to catastrophic. The USA could collapse economically.

OIL DOLLARS

The key to it all is the fiat currency for trading oil. Under an OPEC agreement, all oil has been traded in US dollars since 1971 (after the dropping of the gold standard) which makes the US dollar the de facto major international trading currency. If other nations have to hoard dollars to buy oil, then they want to use that hoard for other trading too. This fact gives America a huge trading advantage and helps make it the dominant economy in the world.

As an economic bloc, the European Union is the only challenger to the USA's economic position, and it created the euro to challenge the dollar in international markets. However, the EU is not yet united behind the euro -- there is a lot of jingoistic national politics involved, not least in Britain -- and in any case, so long as nations throughout the world must hoard dollars to buy oil, the euro can make only very limited inroads into the dollar's dominance.

In 1999, Iraq, with the world's second largest oil reserves, switched to trading its oil in euros. American analysts fell about laughing; Iraq had just made a mistake that was going to beggar the nation. But two years on, alarm bells were sounding; the euro was rising against the dollar, Iraq had given itself a huge economic free kick by switching. Iran started thinking about switching too; Venezuela, the 4th largest oil producer, began looking at it and has been cutting out the dollar by bartering oil with several nations including America's bete noir, Cuba. Russia is seeking to ramp up oil production with Europe (trading in euros) an obvious market.

The greenback's grip on oil trading and consequently on world trade in general, was under serious threat. If America did not stamp on this immediately, this economic brushfire could rapidly be fanned into a wildfire capable of consuming the US's economy and its dominance of world trade.

HOW DOES THE US GET ITS DOLLAR ADVANTAGE?

Imagine this: you are deep in debt but every day you write checks for millions of dollars you don't have -- another luxury car, a holiday home at the beach, the world trip of a lifetime.

Your checks should be worthless but they keep buying stuff because those checks you write never reach the bank! You have an agreement with the owners of one thing everyone wants, call it petrol/gas, that they will accept only your checks as payment. This means everyone must hoard your checks so they can buy petrol/gas. Since they have to keep a stock of your checks, they use them to buy other stuff too. You write a check to buy a TV, the TV shop owner swaps your check for petrol/gas, that seller buys some vegetables at the fruit shop, the fruiterer passes it on to buy bread, the baker buys some flour with it, and on it goes, round and round -- but never back to the bank.

You have a debt on your books, but so long as your check never reaches the bank, you don't have to pay. In effect, you have received your TV free.

This is the position the USA has enjoyed for 30 years -- it has been getting a free world trade ride for all that time. It has been receiving a huge subsidy from everyone else in the world. As it debt has been growing, it has printed more money (written more checks) to keep trading. No wonder it is an economic powerhouse!

Then one day, one petrol seller says he is going to accept another person's checks, a couple of others think that might be a good idea. If this spreads, people are going to stop hoarding your checks and they will come flying home to the bank. Since you don't have enough in the bank to cover all the checks, very nasty stuff is going to hit the fan!

But you are big, tough and very aggressive. You don't scare the other guy who can write checks, he's pretty big too, but given a 'legitimate' excuse, you can beat the tripes out of the lone gas seller and scare him and his mates into submission.

And that, in a nutshell, is what the USA is doing right now with Iraq.

Geoffrey Heard is an Australian who writes on economics and politics.

Terry Macalister Tuesday April 15, 2003 The Guardian

Global oil prices slumped further yesterday as traders feared Iraqi exports would be brought on stream more quickly than expected just as demand is falling.

Supply has already been boosted by Venezuela coming back to full production after a strikes, and a large quantity of crude from Saudi Arabia arriving at US refiners.

Technical obstacles are being fast overcome in Iraq while the political infrastructure is being prepared, with former Iraqi industry official Fadhil Othman tipped as a possible oil minister.

Crude futures in the US slumped 43 cents to $27.75 a barrel and North Sea Brent blend was down 29 cents to $24.46. Prices have fallen more than 30% since fighting began in the Middle East as fears of a wider conflict receded.

Tom Logsden, a senior member of the US army corps of engineers in Iraq, said it was a "definite possibility" that tankers could be loading exports from the northern region inside a few weeks.

The fields around Kirkuk are capable of producing up to 900,000 barrels a day out of the country's pre-war level of 2.5m barrels.

Many believe it is only the Opec cartel of oil producers that can stop prices plummeting further. But Opec warned that prices would remain volatile because of continued uncertainty about output from Iraq, Nigeria and Venezuela.